Alibaba opening more fresh food stores

Jack Ma, the founder of Alibaba, savors the king crab he ordered at Hema Xiansheng, an emerging online-to-offline supermarket backed by Alibaba, in Shanghai in July. (Provided to China Daily)

Alibaba Group Holding Ltd announced on Wednesday the opening of another 30 Hema Xiansheng fresh food supermarkets throughout Beijing this year, as internet giants focus increasingly on the lucrative fresh-food retail sector.

The announcement came right before JD's first fresh food supermarket 7Fresh started its official operation on Thursday, an indication of the increasingly intense competition and rapid expansion of the two e-commerce giants.

With Hema opening in major commercial districts across Beijing including Xizhimen, Guang'anmen and Shuangjing, consumers in major urban areas of Beijing can have their groceries delivered to a location within a radius of three kilometers from the store in 30 minutes.

"We are proud to announce that Hema has discovered an exclusive means of 'new retail' at the beginning of the new year and is expanding quickly in China and outside the world," said Hou Yi, CEO of Hema.

According to Hou, Hema stores are an example of Alibaba's new retail strategy, which aims to digitalize and transform the traditional grocery shopping experience and integrate online and offline shopping.

The Hema stores, which feature a fresh seafood section including king crab and lobster, provide customers the option to either pop into the store and choose their goods, or order online through a proprietary app and have it delivered within half an hour.

The new business model also allows customers to eat in-store through buying products in the supermarket and getting its restaurant staff to cook it.

The online giant said last year that its first such store, which opened more than two years ago in Shanghai, has become profitable.

Shoppers on average make 4.5 purchases per month and visit the supermarket 50 times a year, according to the company. The stores' sales per unit area is three-to-five times those of other supermarkets.

While Hema has opened five stores in Beijing so far, Hou added that in 2018 the company will "concentrate more on the Beijing market in addition to expanding its business across China".

Faced with increasingly fierce domestic competition, the company said that it will strive to improve retail efficiency using new technologies to develop new products and meet new demand.